Thursday, 23 February 2012

2012 Gold Market Trends

By Jack Wogan


It looks as the financial world around us is surely crumbling to the ground and nothing that the governments are doing can actually stop this from happening. Taking into the fact that currencies are facing severe devaluation, the demand for gold is going to remain strong. Financial analysts say that the glittering metal has been in a bull market for more than ten years and it certainly looks as though things are not going to change in the months or years to come. Such an idea is supported by several reasons such as: currency devaluation, global economic decline and the basic supply and demand fundamentals. The form that you are interested in investing in gold is really not so very important, kilo gold bars, gold bullion coins, gold stocks or gold ETFs, as long as you start doing this right away.

Central banks have actually started to print more and more money in order to make sure that the economies around the globe stay afloat. Taking into consideration how things are moving in the financial domain, it is safe to say that this is going to keep happening in the future also. At this point in time, the only two solutions that the banks have at their disposal are: to devaluate the national currencies whether through the low interest rates or through liquidity injections. The direct result of this action is that the dollar is going to become weaker and weaker and the price of gold will rise even more.

Another reason why banks are printing so much money is because they are trying to support the financial institutions. Since this is already happening, it is safe to say that the inflation has reached unbelievable heights. Two of the things that are bullish for the gold price are: the devaluation of the dollar and the inflation. This is why, 2012 is the perfect year to start investing in gold either in the form of physical gold such as kilo gold bars and gold coins or in the forms of paper gold, such as gold stocks or gold ETFs, if you haven't done this already.

Another factor determining the high demand and prices of gold is the Asian market. All the emerging markets, led by China are extremely interested in buying gold in order to stay protected from the inflation. Also, they are doing this so that they can diversify the non-dollar denominated assets.






About the Author:



No comments:

Post a Comment